Getting social mobility wrong

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In the years leading up to their election in 1997, the neoliberal New Labour leadership continuously repeated the “education, education, education” mantra. In doing so, they were drawing on a deep-seated myth that lies at the heart of Western civilisation’s quasi-religion of progress. To understand this, consider Thomas Frank’s criticism of neoliberal guru William Galston:

“In an article he co-wrote in 1998, he told Democrats that ‘the new economy favours a rising learning class over a declining working class.’ To keep up with ‘new realities’, he wrote, Democrats needed to understand that labour was in decline, that the New Deal generation was dying, and that the future belonged to a certain group of affluent, well-educated people. The rest is history. New Democrats did indeed defeat populism. High-minded Democratic centrists did indeed abandon their traditional identification with working people in favour of the ‘learning class’. And Democrats started finding it ‘difficult’ to take action on matters of basic economic fairness…”

According to this view, education was the liberating force that would lead to the meritocratic promised land in which a new technocratic elite would unleash the next round of human progress and economic growth – something neoliberals now call the “fourth industrial revolution.” The problem is that – like so much of our current received wisdom – it was based upon a civilizational anomaly; the period of massive – and not to be repeated – economic expansion that followed the Second World War. Historian Paul Kennedy summarises the sheer scale of this boom:

“The accumulated world industrial output between 1953 and 1973 was comparable in volume to that of the entire century and a half which separated 1953 from 1800. The recovery of war-damaged economies, the development of new technologies, the continued shift from agriculture to industry, the harnessing of national resources within ‘planned economies,’ and the spread of industrialization to the Third World all helped to effect this dramatic change. In an even more emphatic way, and for much the same reasons, the volume of world trade also grew spectacularly after 1945…”

Importantly, the expansion that took place in the 20 years 1953-1973 was not merely a quantitative growth of the economy of the inter-war years. Rather, 1953 to 1973 saw a qualitative revolution. Physicist Tom Murphy casts light on this in a post on his Do The Math blog, where he conducts a thought experiment in which a Victorian from the year 1885 time-travels 65 years into the future to 1950; while a 1950 time traveller goes forward 65 years to 2015:

“Our 19th Century rube would fail to recognize cars/trucks, airplanes, helicopters, and rockets; radio, and television (the telephone was 1875, so just missed this one); toasters, blenders, and electric ranges. Also unknown to the world of 1885 are inventions like radar, nuclear fission, and atomic bombs. The list could go on. Daily life would have undergone so many changes that the old timer would be pretty bewildered, I imagine. It would appear as if the world had blossomed with magic: voices from afar; miniature people dancing in a little picture box; zooming along wide, hard, flat roads at unimaginable speeds—much faster than when uncle Billy’s horse got into the cayenne pepper. The list of “magic” devices would seem to be innumerable.

“Now consider what’s unfamiliar to the 1950 sleeper. Look around your environment and imagine your life as seen through the eyes of a mid-century dweller. What’s new? Most things our eyes land on will be pretty well understood. The big differences are cell phones (which they will understand to be a sort of telephone, albeit with no cord and capable of sending telegram-like communications, but still figuring that it works via radio waves rather than magic), computers (which they will see as interactive televisions), and GPS navigation (okay: that one’s thought to be magic even by today’s folk). They will no doubt be impressed with miniaturization as an evolutionary spectacle, but will tend to have a context for the functional capabilities of our gizmos.

“Telling ourselves that the pace of technological transformation is ever-increasing is just a fun story we like to believe is true. For many of us, I suspect, our whole world order is built on this premise.”

Technology was not, however, the driving force behind the economic revolution of the post war years. In one sense, the driving force was 10 Megajoules (MJ) per Kilogram (Kg) – the difference in energy density between coal and oil (although the difference between the value of a solid and a liquid fuel was also crucial). The world – outside the USA – prior to the Second World War – operated a coal-economy which came with a specific suite of technologies – railways, steamships, manufactories, etc. – designed to harness steam power. In the course of the war, the USA supplied six out of every seven barrels of oil consumed (the remainder coming largely from Venezuela and the Caucasus, with much smaller amounts coming from Persia and Romania). The civilian application of American oil power in the aftermath of the war unleashed a new suite of oil technologies (interstate highways, cars, jet airplanes, etc.) that was sufficient to prevent its allies and conquered adversaries from falling into recession (and succumbing to the allure of Soviet communism); to provide them with the aid needed to rebuild their shattered infrastructure; and to provide the wealth to unleash the biggest economic expansion the world has ever seen.

The story of the economic boom – which was largely limited to America’s immediate allies (Western Europe, Japan, South Korea and the white ex colonies of the British Empire) – is visible in the growth of global oil production and consumption in the boom years; as, of course, is the ultimate cause of the crisis that we have been wrestling with since 1973:

The year 1973 marks the point at which global oil production ceased growing exponentially. That said, the partially artificial cause of the crisis – the OPEC embargo – is reflected in the recovery and peak in 1979 (suggesting that exponential growth might have continued for a few more years; and avoiding the crisis that brought Thatcher and Reagan to power). Less visibly, US conventional oil production had peaked in 1971, leaving the OPEC states and the Soviet Union with the last global reserves of relatively cheap and easy oil. Fields like the North Sea and Alaska were opened up in the 1980s, and the oil industry moved offshore into ever deeper water; but this masked a massive increase in the (energy and monetary) cost of oil recovery (something that has worsened with fracking and bitumen sands).

Go back to the beginning of the industrial revolution, and there was little need for formal education. Most people simply learned skills from parents or, if they were fortunate, secured an apprenticeship with a master artisan. Only the elites and their small clerical retinue required the kind of academic education that we regard as commonplace today. Entire global empires could be administered with numbers of people that would be regarded today as too small to staff a local government housing department.

Initially, industrialisation was seen as de-skilling; resulting in various protest movements such as Luddisim in which dispossessed artisans railed against the machines they perceive as taking their jobs. In time, however, industrialisation and urbanisation created a skills deficit that required a broader technical and clerical class – in a word, complexity. The number of discrete occupations – each with its own technical competencies – began to mushroom. States across the industrial world had no choice but to institute the first tentative steps toward modern public education systems.

Industrial warfare – or at least the fear of it – dictated even more technical education. The social and educational reforms introduced in Bismarck’s German Empire in the late nineteenth century are often regarded as the first enlightened steps toward social democracy; but they owe far more to the Prussian military requirement for a force of healthy reservists with the technical skills to operate the new machine guns and artillery pieces.

These two drivers of education – the needs of the military and the needs of industry – give the lie to the idea that “education for education’s sake” was anything other than a luxury enjoyed by a small class of academicians in the upper reaches of the oldest (today’s tier-one) universities. Nevertheless, in periods of economic expansion, there was always scope for a degree of social mobility as sons (and occasionally daughters) of soil and toil secured places in the expanding education system that allowed them to move into the “white collar” middle class. Which brings us back to the phenomenal economic growth unleashed by the global switch from coal- to oil-powered technologies during the post-war boom. The need for a massive expansion in education to keep pace with the explosion of new technology had already been understood during the war. In Britain, for example, despite severe manpower shortages, the 1944 Education Act had both expanded public education and increased the school leaving age.

Among the baby boom generation that grew up in the years after the war, there is a small group that benefitted hugely from the expansion of education. These were the four percent of working class kids that passed the 11-plus exam, went through grammar school and into university. Many of them – now either in or about to enter retirement – became household names in the worlds of business, politics and entertainment; giving rise to the unfounded myth that selective education is superior to comprehensive schooling… it was for them, but there is little evidence that it was beneficial for the wider population.

Those of us that went to university in the 1970s and 1980s were the last beneficiaries of the post-war education reforms. We did not have to pay tuition fees, were exempt from paying rates (now council tax), had our accommodation costs paid by the local authority, and received a modest maintenance grant to cover living expenses. This was possible because less than 10 percent of the population went to university – the majority of further education taking place in industry-related technical and further education facilities, while the majority of the population learned their skills on the job through apprenticeships and employer-provided training. The benefit of this exclusivity, of course, was that there were relatively few candidates for genuine degree level jobs; allowing the majority of graduates to command a high salary within a few years of graduating.

By the time New Labour (and the Clinton Democrats) arrived on the political scene, the economic expansion that had driven the need for educational expansion was long gone. Entirely new skills and competencies were required in a few niche areas (such as banking and finance, tech, pharmaceuticals and aerospace) which continued to pay large salaries but required far fewer workers. For the majority of the population, however, complexity had already gone into reverse. Those of us who graduated in the 1980s were already becoming surplus to requirement; depending increasingly on state-funded jobs to maintain our incomes. Reforms aimed at pushing half of the population through university in this climate were bound to have unpleasant consequences.

Most obviously, the expansion of university education has necessitated the introduction of student debt. The introduction of student loans to replace maintenance grants was among the last acts of the Thatcher government. So too was the removal of the exemption on paying council tax. But the expansion of the university system after 1997 was so great that debt-financing became inevitable. And while New Labour aimed to keep tuition fees low, it was inevitable that university administrators would insist on increased fees and that governments would be powerless to resist.

The basic driver behind our current situation is a decline in net energy (aka falling Energy Return on Energy Invested or rising Energy cost of energy). As the amount of energy required to obtain the energy needed to run the economy increases, so the energy available to the much larger non-energy economy falls. (For a useful introduction to Surplus Energy Economics, see this post by Tim Morgan). As John Michael Greer explains:

“The energy needed to get the sand out of the tar sands or the oil out of the shale oil has to come from somewhere, and that energy, in turn, is not available for other uses. The result, however you slice it conceptually, is that the upper limit of complexity begins moving down. That sounds abstract, but it adds up to a great deal of very concrete misery, because as already noted, the complexity of a society determines such things as the number of different occupational specialties it can support, the number of employees who are involved in the production and distribution of a given good or service, and so on. There’s a useful phrase for a sustained contraction in the usual measures of complexity in a human ecosystem: ‘economic depression’.”

It is in this light that we can understand two apparently unconnected news stories this week. The first, as reported by Richard Adams at the Guardian is that social mobility has virtually ended:

“Inequality in Britain is ‘now entrenched from birth to work’, according to a damning report by the government’s social mobility commission that charts failures in education and employment policies that have caused class privilege to become more entrenched…

“The report highlights how entry into professional occupations is largely dependent on parents’ careers, with children from professional backgrounds 80% more likely to go into a professional occupation such as law or medicine than their less privileged peers, thanks to their connections and their stronger educational qualifications.”

Ironically, the proposed solution to this problem is the worn neoliberal “education, education, education.” But this brings us to the second news story this week; an Office for National Statistics study which finds that a third of graduates are working in jobs that do not require a university education. As the BBC report:

“The Office for National Statistics (ONS) says 31% of graduates are overeducated for the job they are doing.

“For those graduating before 1992, the number was only 22%, but this jumped to 34% for those graduating after 2007.

“London had the highest proportion of overeducated workers in the UK, with about 25% overqualified for their job.

“Graduates in arts and humanities were more likely to be under-using their education.”

Regular readers will not be surprised to learn that both the BBC and the ONS are clueless as to why this situation has arisen; and neither are able to make the connection with the end of social mobility. The dent to neoliberal ideology is simply too great to produce anything other than denial. And so the ONS speculates that graduates may simply be choosing to work in shitty jobs that don’t pay enough as some kind of lifestyle choice.

Those who use a surplus energy perspective, in contrast, will not be at all surprised that the value of education has declined and that social mobility has all but come to an end. For decades, Britain – along with much of the developed world – has been morphing into an 80:20 society in which the majority of the population has seen its standard of living plummet while a shrinking affluent class working in and around London and the archipelago of tier-one university campuses that still provide high-paid/high-skilled employment pulls up the social mobility ladder. Nor is it surprising that the first graduate areas to collapse are arts and humanities; since these largely depend on some combination of state support and private philanthropy (which become harder to sustain as net energy declines).

As the number of occupational specialties our declining net energy allows us to support continues to shrink, we can expect to see “over-education” in a much broader swathe of the economy; especially in those occupations that depend upon state funding. In such circumstances, it is inevitable that parents already in the affluent class will use all of the social, economic and political capital available to them to ensure that it is their children rather than those from the 80 percent who get places in the tier-one universities and go on to secure one of the shrinking number of high-paid professional jobs after they graduate.

Armed with this understanding, it is clear that Generation Z – the one just going into work or further education – are quite correct to view student loans and graduate degrees with suspicion. Unless they can secure a place in a top-tier university to study one of a handful of STEM subjects that still proves a route into a high-paid profession, they are far better off seeking a trade or saving their money by cutting out the Ponzi middleman and going straight to burger flipping, driving for Uber or delivering takeaway food for Deliveroo.

As you made it to the end…

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